CC churning - equifax scores

[burmans]

Just another data point...
My last Credit Card application was in June 2017 (yes, slack, I know...).
My last 11 month’s credit scores (according to CreditSavvy) were all 724.
Then this month, following the introduction of the new CCR system, my score dropped to 565.
As far as I can see, the only change to the data they have is the addition of payment information on one credit card account (which has been closed for about 18 months), which shows a credit limit of $zero and a Repayments On Time history of 100%.
I have a ‘Real Life’ 100% pay on time record, and significant assets & income.
I know that the rating agencies are trying to produce scores on the basis of information which is known to be incomplete. But when any rational assessment of my ‘Real, full fact’ financial history & situation would probably result in a credit score of 950+ Vs the current 565, the system looks to be a bit broken & unreliable.

/end of grizzle...

I think you've hit it on the head. They have changed to a system which weights repayment data, indeed the most weight is given to recent repayment data (last 3 months). In your case you have one account closed some time ago, i.e. they have no recent positive data for you. From the number of complaints here it sounds like they were somewhat premature to start using a comprehensive credit score with enough data in the system to support its use.

On the plus side I think its irrelevant to compare you old score vs new if the basis has totally changed and it sounds like this current issue is across many people not just yourself. I haven't seen many (I think only one) report of a better score since this weekends changes.

Tis should all change as more data is contributed to the system of course. Also Experian is the lesser preferred of the two main agencies with credit providers and I don't think they have done themselves and favours in rushing this score to the market before its really ready.

 

[deebens]

Just got an email from Get Credit Score/Equifax about the new system. Log in there and my score is no difference.

 

[TomVexille]

Huge number but worthwhile to compare to the total Australian household debt of $2 trillion-i.e 1.6% of that is on credit cards.
56% is owner-occupied mortgages, 36% investor debt, 3.1 % personal loans, 2.1% HECS

Of course

You also have to wonder how many people are running their cards out to their limit, and then rolling the balance into their mortgage and starting over, and over, and over...

 

[robtemt]

The thing that worries me, is creditors that rely only on credit score. For instance, energy providers. A few years ago, after we secured a $600K mortgage for our first home, had 3 credit cards with no balance all paid in full, and no defaults of judgements, we were denied an electricity account by Origin due only to the Veda credit score, which was an automated process. Despite making over $120K per year, in a government job, they refused to open an account for us. This is the sort of issue I'm worried about with the new scoring.

 

[I love to travel]

The thing that worries me, is creditors that rely only on credit score. For instance, energy providers. A few years ago, after we secured a $600K mortgage for our first home, had 3 credit cards with no balance all paid in full, and no defaults of judgements, we were denied an electricity account by Origin due only to the Veda credit score, which was an automated process. Despite making over $120K per year, in a government job, they refused to open an account for us. This is the sort of issue I'm worried about with the new scoring.

Wow didn't realise credit enquiries are made for new electricity accounts. So in this new system you change electricity provider your credit score goes down?

 

[robtemt]

Wow didn't realise credit enquiries are made for new electricity accounts. So in this new system you change electricity provider your credit score goes down?

We were actually denied accounts by Red and Origin, but a month later approved for Amex Plat Charge. Made no sense. Filed a complaint with the ombudsman, with noting by a runaround. Spoke to someone at Veda who said there was nothing negative on my report except for moving multiple times in a few years, something that an energy company should be used to.....

 

[Dr Ralph]

Wow didn't realise credit enquiries are made for new electricity accounts. So in this new system you change electricity provider your credit score goes down?

Not always and potentially.

 

[JohnK]

I seem to remember some 'doom and gloom' article in a newspaper saying Australia was in debt crisis as we had the highest national proportion of people paying for their groceries with a credit card. I'm sure that true but most wont be running that up as a recurring debt

Most have a recurring debt and the minority pay off debt on time.

The only reason churners are finding generous bonus points deals is the hope they'll trap another into recurring debt otherwise not much profit to be had from someone churning a credit card in <12 months.

 

[melbkate]

I queried my knock back for the Bendigo Qantas card. $3000 limit! Been a customer for 20 years, shareholder and working. No late payments or debt.

I was told I had applied for too many credit cards in recent times. I was also told if I wanted to get one, not to apply for anything for 6 months to 'clear it up'.

Applied for my 2nd NAB Altitude anyway. Was offered the Premium with only 50,000 points. Had no trouble getting the Altitude 6 months earlier. So something seems to have changed.

 

[zig]

My creditsavvy score fell from 790 to 549. Last year I applied for 2 cards (Westpac and ANZ) after years of no new applications. Always pay full amount on time, no defaults. I don’t understand this system.

So from 549 on the weekend my score is now 709 this morning. At least it is on the upward trend, although still not back to where it was before this started.

Anyone else on the way back up?

 

[deebens]

So from 549 on the weekend my score is now 709 this morning. At least it is on the upward trend, although still not back to where it was before this started.

Anyone else on the way back up?

Just checked. Nope.

 

[mviy]

How can you get score updates so regularly?

I only get score updates once a month from Equifax.

 

[get me outta here]

My Veda has been ~580 for the past 12 months, (with 605 one month and 570 one month). Have had 5 new cc apps and no knock backs.

 

[zig]

How can you get score updates so regularly?

I only get score updates once a month from Equifax.

I just logged into my account and saw the changed score.

 

[jkbaus]

My Credit savvy score dropped from 706 to 593.
7 credit enquires on file - 3 in 2017, 2 in 2016, 2 in 2015.
No negative events.
Always paid full amount before by due date.

5 of those cards have been cancelled over the last 2 years.
Anyone know when say application from say 2015 and cancelled by mid 2016 will drop off the file?

I have a couple of long standing cards cards with relatively high limits that aren't listed.
Any idea if these are likely to be included in the short term future?

I am self funded retiree with modest income and was hoping to apply for a platinum visa or master card for sign up bonus soon.
I Was also planning to cancel DJ Amex and get explorer instead although wouldn't get any bonus as I already have platinum edge.

Not sure if I should do application for visa platinum and/or Amex Explorer in next month or so or wait till credit score (maybe) improves.

Update
Applied online for ANZ Travel adventures card yesterday (via Pointshack link for 40k velocity points).

Provided documents this afternoon about 3pm.
Received SMS a couple of hours later advising approved and that welcome pack should be received in a couple of days.

 

[Jamesaurus]

This page helped me understand the changes, particularly the table about 1/3 way down:
What is Comprehensive Credit Reporting and how does it affect you? | finder.com.au

 

[deebens]

From inside mine I can now see NAB is the only one who has actually provided data.

So NAB's showing the cards I've opened and closed and 100% repayment record.

 

[There'sOnlyOneJimmy]

Just another data point...
My last Credit Card application was in June 2017 (yes, slack, I know...).
My last 11 month’s credit scores (according to CreditSavvy) were all 724.
Then this month, following the introduction of the new CCR system, my score dropped to 565.
As far as I can see, the only change to the data they have is the addition of payment information on one credit card account (which has been closed for about 18 months), which shows a credit limit of $zero and a Repayments On Time history of 100%.
I have a ‘Real Life’ 100% pay on time record, and significant assets & income.
I know that the rating agencies are trying to produce scores on the basis of information which is known to be incomplete. But when any rational assessment of my ‘Real, full fact’ financial history & situation would probably result in a credit score of 950+ Vs the current 565, the system looks to be a bit broken & unreliable.

/end of grizzle...

Update to my previous post...

CreditSavvy seem to have seen the error of their ways and have restored my score back to 724.
Refer screenshot below (showing both scores for Feb18):

 

[deebens]

Mine didn't budge.

 

[I love to travel]

No budge for me either.